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Media/Entertainment
youngchinabiz.com : latest Business news about Media – Entertainment in China by expert / journalist Doug Young : more than two decades of experience in writting about Chinese Companies
Bottom line: The strong debut for Rise Education reflects good investor appetite for new China concept stocks in New York, which should bode well for a new listing by Jianpu and could also buoy iClick.
Jianpu, iClick file for NY listings
The IPO floodgates are opening wider following the hugely successful listings of microlender Qudian (NYSE: QD) in New York last week and the Hong Kong listing of online insurance provider ZhongAn (HKEx: 6060) shortly before that. Those two nice debuts may be partly behind an equally impressive launch for Rise (Nasdaq: REDU), an education services firm that looks far less high-tech than that other pair.
At the same time, two other higher-tech names have just made their first public filings, with iClick and JianpuTechnology aiming to raise $100 million and $200 million in New York, respectively. Read Full Post…
Bottom line: LeEco is likely to sell its stake in Coolpad in the next six months, and new investor Centralcon could emerge as the buyer with a goal of trying to turn the company around.
Coolpad finds new suitor
A potential white knight has stepped forward to provide some funds for struggling smartphone maker Coolpad (HKEx: 2369), in a fresh sign that controlling stakeholder LeEco(Shenzhen: 300104) may be preparing to dump the company as part of its protracted reorganization. The amount of the fund-raising is relatively small at HK$582 million ($75 million), though it could be enough to help Coolpad figure out what it wants to do next.
The more interesting question is whether this signals that LeEco is planning to dump Coolpad and the smartphone business in general, which I’ve been predicting for a while since the ousting of LeEco founder Jia Yueting from the company in July. Smartphones was one of the many businesses that Jia entered at the height of his expansion euphoria, and seems like a likely candidate to be jettisoned as the company’s new managers try to right this foundering ship. Read Full Post…
Bottom line: A periodic window of IPOs that opens every 2-3 years is taking shape, with fintechs and other new categories like online literature likely to do well, while older concepts like e-commerce could struggle for attention.
My long-predicted IPO floodgate has finally burst, with no less than four major offerings in the headlines as we go into the new week. The new offerings I’m referring to involve two in the US, one for fintech startup Ppdai and another that has been talked about forever for Sogou, the search engine backed by Internet superstar Tencent(HKEx: 700) and the less steller Sohu(Nasdaq: SOHU).
Meantime, one of the other IPOs also involves Tencent, with its China Reading online literature unit getting cleared by the Hong Kong stock exchange and set to file its prospectus. Last but not least is Bona Film, the formerly New York-listed company that has been cleared for a re-listing in China. Read Full Post…
Bottom line: A dissident shareholder’s proxy battle for a seat on Sina’s board stands a chance of success, but the odds are probably 40 percent or lower due to large holdings by Sina’s CEO.
Sina board seat at center of proxy fight
One of the more lively investor plays to shake up an insular US-listed Chinese company is taking place at Internet stalwart Sina(Nasdaq: SINA), with a flurry of he-said-she-said statements coming from the company and dissident shareholder Aristeia Capital. This somewhat unusual development first made headlines about a month ago, when Aristeia unexpectedly announced it was nominating two people to Sina’s board to shake up the company. Sina has responded with its own series of announcements justifying why its own long-serving board members are the best fit for the company.
All of this will come to a head at Sina’s annual meeting on Nov. 3, when one of its five board members will stand for re-election. Sina wants its own long-serving candidate to win the spot, while both of Aristeia’s candidates are contesting the position. What’s interesting here is that Sina is one of the few US-traded Chinese companies where the founders and top managers really don’t have the kind of overwhelming control of its stock that you often see. That means this particular board seat could really be up for grabs, which could perhaps shake up this underperforming company. Read Full Post…
Bottom line: China Reading’s IPO should be well received when it launches its road show as soon next week, and the shares should price and debut strongly on its good profit margins and growth prospects.
China Reading set to launch IPO road show
Another hot IPO with ties to one of China’s leading Internet firms is nearing the starting line, with word that the highly anticipated listing for Tencent’s(HKEx: 700) online literature unit is finally going to kick off shortly. That means we will finally get to see some financials for China Reading, whose plans for an $800 million IPO have been discussed since as early as February.
In fact, this particular IPO has been discussed for far longer than that, since the company has gone through a number of forms in its long march to market. I’ll recount that shortly, but will begin with some quick thoughts on this offering’s chances for success. We’ve already seen in this burgeoning IPO season that having a pedigree from a name like Tencent doesn’t guarantee success, as was the case with Alibaba-backed logistics firm Best Inc. (NYSE: BSTI). That IPO priced miserably due to stiff competition in the logistics space, and the stock is only up a modest 6 percent since it started trading in New York. Read Full Post…
Bottom line: A new music re-licensing deal between Alibaba and Tencent, combined with a meeting between the copyright regulator and major online music sellers, hint at attempts to create a more level playing field in the space.
Alibaba, Tencent in music cross-licensing deal
A couple of items from the music sector are in the headlines today, showing how tricky the situation is becoming with copyrights and online licensing in China. One of those has two major players, the music services of Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700), signing an agreement to cross-license music to each other when one of them owns the rights to such music. The other has China’s copyright office actually calling a meeting between those two companies and two other major players, NetEase(Nasdaq: NTES) and Baidu(Nasdaq: BIDU), to discuss issues confronting the industry.
Two issues appear to be driving these two deals that appear to be related. One is concerns from the music industry that rights to their songs will become fragmented and confined to single platforms under the current licensing system, limiting consumer choice. Similar concerns might also be what’s driving the regulator to get involved as well. An interesting footnote to this might be whether the same thing could soon happen in the video licensing arena, which shares similar issues. Read Full Post…
Bottom line: Samsung’s new $7 billion investment in a chip expansion in Xi’an should help to earn big government goodwill, which could help position its smartphone division for a rebound in China.
Samsung expands chip chip plant
A major new China investment by chip maker Samsung(Seoul: 005930) is spotlighting just how important the market has become to the company, and South Korean companies in general, and how they are trying to play into Beijing’s agendas to maintain their place at the table. That’s become all the more important lately, as a disagreement between Beijing and Seoul has been costing South Korean companies business in China, as often happens when such political disputes spill out into the business sector.
This particular investment, totaling $7 billion, was obviously in the planning stages long before that dispute broke out earlier this year, involving Seoul’s decision to install a sophisticated anti-missile defense system supplied by the US to counter the North Korean threat. But Samsung’s decision to make its announcement now looks shrewd, as it should win it some goodwill from Beijing at a time when the company’s smartphones face similar struggles in China that they’re seeing in the rest of the world. Read Full Post…
Bottom line: The rumored departure of LeEco’s mobile chief is likely to be followed by the official closure of its smartphone division and sale of its Coolpad stake by the end of October.
LeEco mobile head reportedly resigns
As we approach the first anniversary of the crisis that has seen the rapid demise of LeEco(Shenzhen: 300104), the latest headlines are hinting at the imminent unraveling of the former video superstar’s smartphone business. The headlines I’m referring to say the CEO of LeEco’s mobile division, who has the very un-Chinese looking name of Abulikemu Abulimiti, has left the company.
Like many other things involving LeEco these days, there’s no official confirmation from the company on whether the mobile division chief has really left. Instead, the reports are quoting company insiders, but adding that it’s a bit unclear whether he has actually left or just resigned. That pretty much reflects the state of chaos at LeEco these days, where it’s quite difficult to confirm what exactly is happening inside the company anymore. Read Full Post…
Bottom line: Focus Media could make a bid for Sina’s core web portal assets within the next year, following their co-investment in a fashion public relations specialist.
Sina, Focus Media invest in Bazaar
It’s a relatively slow time during the final dog days of summer here in Beijing, so I thought I would zoom in on an interesting new investment in a company called Bazaar Energy, which bills itself as a “fashion public relations solutions provider.” But what’s most interesting about this investment isn’t the company receiving the money, but rather the pair of companies providing the funding.
In this case it’s the pair of leading web portal Sina(Nasdaq: SINA) and outdoor media firm Focus Media (Shenzhen: 002027) that are providing the money, which appears to be quite a modest sum. This particular pairing is interesting less for the target company, and more because it brings together a pair of investors that were once intending to merge. Much has happened since that merger plan fell apart, and this new pairing raises the slim but still interesting prospect that this pair of companies might attempt to relaunch that plan. Read Full Post…
Bottom line: Tencent could be forced to take more measures to control addictive play of its popular “Honour of Kings” game, which could take a short-term toll on its gaming business.
Military critical of Tencent hit game
Internet juggernaut Tencent(HKEx: 700) has been in nonstop headlines lately for its smash hit game called “Honour of Kings”, along with its stock price that keeps reaching new highs. The company must certainly be feeling a bit uneasy from all the publicity, especially since Tencent tends to be quite low-key in line with the style of founder Pony Ma. But equally worrisome is the negative publicity “Honour of Kings” has been getting due to its addictive nature.
There’s a reason that Tencent and some of its major peers can continue to post strong double-digit growth despite their huge size. In Tencent’s case the reason lies at least partly with its phenomenal success as a game developer and operator, and also its related ability to create strong online communities from such gamers. Read Full Post…
Bottom line: The formation of a joint venture between six leading cable operators looks designed to jump start Beijing’s stalled attempt to create a national player that can compete with the big telcos.
Five regions in cable TV joint venture
After years of snail’s-pace progress at consolidating the nation’s fragmented cable TV operators, a group of leading players is finally taking matters into their own hands with announcement of what could be a breakthrough joint venture. I’ve followed this story for a while now, and, along with everyone else, have been impatiently waiting for a state-supported national cable operator, called China Broadcasting Network Co., to take shape and provide a strong interesting alternative to the nation’s three big telcos for network-based services.
But such a development has moved forward at a pace even slower than molasses, mostly due to the huge bureaucracy involved. That mostly involves the interference of local interests, which are loathe to give up control over municipal and provincial cable TV networks, which they run as personal regional propaganda machines. As a result, all of the nation’s cable TV networks are dying a slow but certain death, as they get overtaken not only by the telcos but also by a rising generation of private sector Internet TV services like Youku and iQiyi. Read Full Post…
